real value appliances ltd Directors report

REAL VALUE APPLIANCES LIMITED ANNUAL REPORT 2000-2001 DIRECTORS REPORT Dear Members, Your Directors present the Twelfth Annual Report of your Company together with the Audited Statement of Accounts for the year ended 30th June, 2001. THE YEAR UNDER REVIEW Your Company continued to suffer from inadequate working capital due to which the sales and job work receipts grew only marginally by 9% during the year as compared to he previous year. The loss for the year was lower at Rs. 99.18 lacs as compared to Rs. 253.86 lacs. DIVIDEND Your Directors regret their inability to declare any dividend or the year, as financial results do not permit the same. BIFR STATUS The follow-up meeting of the BIFR took place on 31st July,2001 and the salient features of the meeting were as under: 1. The company should negotiate with DGFT and Government of Maharashtra regarding reliefs and concessions. 2. The right of recompense to Secured Creditors and withdrawal of reliefs and concessions in case of default in payment of interest and instalments. 3. The Company should within a period of 6 weeks, furnish full details of the proposed modifications to the MA. 4. The Company and Joe Sign Makers should mutually sort out their dispute regarding outstandings. 1. (a) As regards DGFT, the Company has made an Application to the Policy Relaxation Committee for reliefs and concessions in terms of Para 4.14 of the Exim Policy on 10th August, 2001 and the Company has requested for a personal hearing at their next meeting to be held in January, 2002. 1. (b) As regards Government of Maharashtra, the Company has written to Dy. Director of Industries (BIFR) for Development Comissioner (Industries) on 10th August, 2001 to sort out the issue regarding the reliefs and concessions sought by the Company vide Para 6.6. of the Sanctioned Rehabilitation Scheme. 2. In view of the likely modifications in the Sanctioned Scheme, issues such as cut off date, co-promoter participation, due dates, etc. are likely to undergo changes. Hence, the terms and conditions of ,banks/institutions would be accepted at the time of firming up of the modifications by, the Honourable BIFR. 3. The American Marketing Company & Co-promoter had raised concerns over the future continuity of the business, viz. slippages in 18 year performance, repealing of SICA etc. In order to tie up and satisfy them, the Company had requested Honourable BIFR for a 4 month period. BIFR vide summary record proceedings dated 9th August, 2001 directed the Company to submit revised projections within a period of six weeks. On perusing the summary record of the proceedings, the American Marketing Company has formed a view that the company does not enjoy the confidence of most of the creditors any more and therefore will not be in a position to guarantee supply of product in the near future even in smaller quantities. On the basis of this view, they do not wish to continue dealing with the Company. The Co-promoters equity participation was conditional to the revised MOU with the American company. With the withdrawal of the American Marketing Company, the Co-Promoters have decided to put on hold their Investment until a clear picture emerges. On the basis of the above, the Company is not able to go ahead with the Vacumizer division. As the Company is not in a position to guarantee external business partners about gaining creditors support thereby, turnover from the Vacumizer and Contract Manufacturing, emanating from the Vashi factory is not possible in the short and medium term. The Company sought a period of 4-6 months to begin afresh negotiations with potential strategic investors and recasting the Ceasefire Division taking current realities into consideration. In this connection, the MA has suggested that the new approach to the revised rehabilitation scheme be discussed with them. 4. The Company had indicated their readiness to meet Joe Sign Makers to resolve the issue. In the meantime, Joe Sign Makers have made a Petition to BIFR to grant them permission to proceed with the case before the Bombay High Court. AUDITORS M/s. Suresh C. Maniar & Co., Chartered Accountants, our present Auditors shall retire at the forthcoming Annual General Meeting. They have pursuant to Section 224(1) of the Companies Act, 1956 furnished a Certificate regarding their eligibility for reappointment as the Companys Auditors. You are requested to appoint them as Auditors for the current year and fix their remuneration. AUDITORS REPORT Auditors Report to the Accounts has been considered by the Board and clarified, wherever necessary, in the schedule "Notes to the Accounts". AUDIT COMMITTEE As required under Section 292A of the Companies Act, 1956, the Board has appointed Audit Committee on 6th January, 2001, consisting of Mr. Pheroze Engineer, Mr. Vinod Pandya and Mr. V. Balasubramanian as its members. The terms of reference of this committee are as under: a. Overseeing the Companys financial reporting process and ensuring correct, adequate and credible disclosure of financial information. b. Recommending appointment and removal of external Auditors and fixing of their fees. c. Reviewing with management the Annual Financial statements with special emphasis on accounting policies and practices, compliance with accounting standards and other legal requirements concerning financial statements. d. Reviewing the adequacy of the audit and the compliance function, including their policies, procedures, techniques and other regulatory requirements. e. Reviewing the adequacy of internal control systems and significant Audit findings. PARTICULARS OF EMPLOYEES The relations between the employees and the Management continued to be cordial during the year under review. Your directors wish to place on record their appreciation of the sincere and devoted efforts of the Employees at all levels and their contribution to the Company. Particulars of Employees as required under Section, 217(2A) of the Companies Act, 1956 are set out in the Statement attached hereto and forming part of this Directors Report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and Accounts are being sent to the shareholders of the Company, excluding the statement of particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Corporate Office of the Company. PARTICULARS RELATING TO THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO. CONSERVATION OF ENERGY The Company has taken adequate measures to reduce power consumption. The Company has taken necessary steps to bring in awareness at all levels about conserving and avoiding wastage of energy. TECHNOLOGY ABSORPTION AND ADOPTION The Company has its own Design and Engineering department. The imported technology has been fully absorbed & improvements have been effected upon the same. FOREIGN EXCHANGE EARNINGS AND OUTGO The relevant figures relating to the foreign exchange used and earned are given in the statement of additional information appended to the accounts. SUBSIDIARY COMPANY The Audited accounts of the Companys subsidiary, Real Value Holdings Gmbh, Austria for the year ended 31st December, 2000 has not been received and hence not attached. DEPOSITS The deposits from the public and shareholders as on 30th June, 2001 amounted to Rs. 419.29 lacs which were due and unpaid. DIRECTORS Mr. Vinod Pandya retires by rotation and being eligible offers himself for reappointment. During the year the Board appointed Mr. V. Balasubramanian as an additional Director of the Company. He holds office till the date of the ensuing Annual General Meeting. The Company has received notice from a Shareholder proposing the candidature of Mr. V. Balasubramanian as a Director of the Company. Mr. A. R. Srinivasan resigned from the Directorship of the Company effective 27th December, 2000. Your Directors wish to place on record their appreciation for the services rendered by Mr. Srinivasan during his tenure as Director of the Company. BIFR appointed Dr. P. L. Malhotra on the Board of the Company as their Nominee. Similarly IDBI has appointed Mr. R. C. Sehgal as their Nominee on the Board. DIRECTORS RESPONSIBILITY STATEMENT: As required pursuant to the Companies (Amendment) Act,2000, the Board of Directors confirm as under: (a) that in the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures. (b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial year and of the Loss of the Company for that period. (c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and (d) that the Directors have prepared the annual accounts on going concern basis. DEPOSITORY SYSTEM The Company has entered into an agreement with National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL) for dematerialisation of the Companys shares. Members now have the option to hold their shares in Demat form either through the NSDL or CDSL. Holding of shares in Demat form is only optional and it is not compulsory. Members who wish to hold shares in physical form may continue to hold Share Certificates. However, SEBI has decided that trading in the shares of the Company for all Investors will be in dematerialised form from 2nd January, 2002. For and on behalf of the Board PHEROZE ENGINEER CHAIRMAN & MANAGING DIRECTOR Mumbai Date: 28th November, 2001